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Tag Archives: Windfall

Budget, Recap Week 4

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After keeping a budget for 4 weeks, what have I learned?

Things don’t create happiness.  Living honestly does.  Learning does.  Sharing ones truth does.

As for money, it has regained its place as a tool not a master.

Have we kept to the budget?  Yes and no.  We kept spending within the jar amounts set for each week.  We even had money left over that we were able to redistribute to areas we want to save for (our New Years vacation!).  On the no side, a couple big things happened this month.  Hubby left his job and as a result received a larger check (leave payout, small bonus).  Since he already has work lined up for the month (thank God!), we used it to pay for some big ticket items (new tires and a snow blower, exciting I know).  To go back to our plan, future windfalls will be distributed according to our windfall plan.

One huge change in my life resulting directly from implementing a budget with my spouse, we don’t fight about money anymore.  Not once in four weeks.  This is a big deal for us as we have regularly fought about money  in the decade we have been married.  What was the change?  We each have “allowances”, an amount we receive a week to spend how we chose, no questions asked.  No more tiffs over lattes or drinks with friends, no more comparison of who spent what on clothes.  We are a team on the big picture of how we use our money and the day to day stuff no longer matters.  It is clear when we are meeting our goals.  Since we have completely combined our finances since day one, this means financial peace in our household.

Tell me, do you bicker over money? Do you give yourself an allowance?  Any tips for how you have found financial peace in your household?

 

Budget, once again (Part III) Self-Employment

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As soon as the jars were filled our budget drastically changed. What is the saying? Want to see God laugh, tell him your plans? Hubby received an offer that allows us to manifest a major lifestyle change. He will be self-employed, have greater flexibility and time with our family. So, how on earth does one budget with the variable income of self-employment?

After some research, the best way for us to budget a variable income is to set a realistic budget based on the known income and a reasonable expectation for the variable income. Then build in safe guards, re-evaluation periods and a plan for windfalls.

1. Safe Guards: Determine an amount we are comfortable using from our savings to maintain our budget for the first three months.

  • As checks come in, pay back savings first.
  • Keep reserves in the account to float future months.
  • Remember every day that his pay will be irregular. Don’t stress. Breathe and plan.

2. Re-evaluation Period: Check in at the end of the first, second, and third month.

  • Assess how realistic the budget has been and reallocate any money left over.
  • Discuss short term savings (upcoming expenses, desired purchases, etc.). Build these items into the budget and windfall plan.
  • After the first 3 months, switch to quarterly check-ins.

3. Windfalls: Any amount over the budget x 4 months should be distributed according to our “windfall plan”.

  • 50% to debt repayment (we took on low-interest debt for the home purchase and remodel).
  • 25% to the short term saving categories (vacation,snowblower,  furniture).
  • 25% to the cash jars for a bit of float.

This will be interesting to watch develop. I have a feeling the hardest part will be the psychological test of not knowing when the next check will come in, how much we will bring in a year, etc. That said, there is no great reward without risk. There is the real chance that our family will have more time together, more adventures and bring in the same amount (or more!) of money a year.

Talk back, are you self-employed or thinking about becoming? Do you budget? What is the hardest part of being self-employed? What do you wish someone had told you?

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